ACIT, Hyderabad v. M/s Ravindranath GE Medical Association Pvt. Ltd., Hyderabad

ITA 190/HYD/2010 | 2001-2002
Pronouncement Date: 07-01-2011 | Result: Dismissed

Appeal Details

RSA Number 19022514 RSA 2010
Assessee PAN AABCR4013N
Bench Hyderabad
Appeal Number ITA 190/HYD/2010
Duration Of Justice 11 month(s) 1 day(s)
Appellant ACIT, Hyderabad
Respondent M/s Ravindranath GE Medical Association Pvt. Ltd., Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 07-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 07-01-2011
Date Of Final Hearing 29-12-2010
Next Hearing Date 29-12-2010
Assessment Year 2001-2002
Appeal Filed On 05-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A' HYDERABAD BEFORE SHRI G.C.GUPTA VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO.190/HYD/10 : ASSTT. YEAR 2001-02 ASST. COMMISSIONER OF INCOME- TAX CENTRAL CIRCLE 5 HYDERABAD V/S. M/S.RAVINDRANATH GE MEDICAL ASSOCIATION PVT. LTD. HYDERABAD. ( PAN AABCR 4013 N ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.VENKAT REDDY RESPONDENT BY : SHRI A.V.RAGHURAM O R D E R PER G.C.GUPTA VICE PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 20 01-02 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME -TAX(APPEALS). 2. GROUND OF APPEAL NO.1 OF THE REVENUE IS GENERAL IN NATURE. 3. GROUND OF APPEAL NO.2 OF THE REVENUE IS AS UNDER - 'THE CIT(A) DID NOT APPRECIATE THE FACT THAT THE RE NOVATION EXPENDITURE WAS CAPITALIZED BY THE ASSESSEE.' THIS GROUND OF APPEAL HAS BEEN WITHDRAWN BY THE DEPAR TMENT AND ACCORDINGLY THIS GROUND OF APPEAL IS REJECTED AS WITHDRAW N. ITA NO .190./HYD/10 M/S.RAVINDRANATH GE MEDICAL ASSOCIATION PVT. LTD. HYDERABAD. 2 4. GROUNDS OF APPEAL NO. 3 AND 4 OF THE REVENUE AR E AS UNDER- '3. THE ASSESSEE HAS NOT FURNISHED CERTIFICATE AS R EQUIRED U/S. 35(1)(I) OF THE I.T. ACT 1961 AND RULE 6(1) OF THE INCOME TAX RULES IN RESPECT OF CLAIM OF R&D EXPENDITURE. 4. APPROPRIATE CLASSIFICATION OF THE EXPENDITURE C AN NOT BE ARRIVED AT BY THE ASSESSING OFFICER AFTER A LONG PE RIOD. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITT ED THAT THE ASSESSEE COULD NOT FILE CERTIFICATE AS REQUIRED UNDER S.35(1 )(I) OF THE INCOME- TAX ACT 1961 AND RULE 6(1) OF THE INCOME-TAX RULES I N RESPECT OF ITS CLAIM FOR RESEARCH AND DEVELOPMENT EXPENDITURE. HE SUBMITTED THAT TO CLAIM DEDUCTION UNDER S.35(1)(I) THE ASSESSEE SHOULD HAVE RE QUISITE RECOGNITION BY THE COMPETENT AUTHORITY FOR HAVING IN-HOUSE R&D UN IT. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE RECOGNITION BY THE COMPETENT AUTHORITY WAS A ESSENTIAL PREREQUISITE WHEN THE ASSESSEE CLAIMS HIGHER DEDUCTION AT 125% OR 150% OF THE EX PENDITURE UNDER SPECIFIED CIRCUMSTANCES MENTIONED IN THE PROVISIONS OF THE ACT. THE PROVISION OF S.35(1)(I) OF THE INCOME-TAX ACT DOES NOT SPECIFY AN Y SUCH APPROVAL BY THE COMPETENT AUTHORITY. HE RELIED ON THE ORDER OF T HE CIT(A) AND IN PARTICULAR PARA 4.2 OF THE APPELLATE ORDER OF THE CI T(A). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). WE FIND THAT TH E CIT(A) HAS OBSERVED THAT RECOGNITION OF THE COMPETENT AUTHORITY WAS AN ESSE NTIAL PRE-REQUISITE ONLY WHEN THE ASSESSEE CLAIMS A HIGHER DEDUCTION AT THE RA TE OF 125% OR 150% OF THE EXPENDITURE UNDER SPECIFIED CIRCUMSTANCES LIKE IN S.35(2AB). THE CIT(A) HAS FURTHER OBSERVED THAT S.35(1)(I) OF T HE INCOME-TAX ACT DOES ITA NO .190./HYD/10 M/S.RAVINDRANATH GE MEDICAL ASSOCIATION PVT. LTD. HYDERABAD. 3 NOT STIPULATE ANY SPECIFIC APPROVAL AND THAT DEDUCTION UNDER THIS SECTION WAS ALLOWABLE FOR ANY EXPENDITURE NOT BEING IN THE NATU RE OF CAPITAL EXPENDITURE LAID OUT OR EXPENDED ON SCIENTIFIC RESEARCH RELATED TO B USINESS. WE FIND THAT THE REVENUE HAS NOT DOUBTED THE CASE OF THE ASSESSEE THA T IT WAS CARRYING ON THE ACTIVITY OF SCIENTIFIC RESEARCH AND THAT THE EXPEN DITURE WAS REVENUE IN NATURE. WE FIND THAT THE ASSESSEE HAS NOT CLAIMED ANY WEI GHTED DEDUCTION OF MORE THAN THE AMOUNT OF EXPENDITURE INCURRED BY IT O N SCIENTIFIC RESEARCH AND THEREFORE THERE IS NO MISTAKE IN THE ORDER OF THE C IT(A) IN HOLDING THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS NOT JUSTIFIED . WE ALSO UPHOLD THE FINDING OF THE CIT(A) THAT THE ASSESSEE'S CONTENTION THAT THE EXPENDITURE WAS ALTERNATIVELY ALLOWABLE UNDER S.37(1) WAS ALSO NOT WITHOUT BASIS. IN THIS VIEW OF THE MATTER WE HOLD THAT THERE IS NO MIST AKE IN THE ORDER OF THE CIT(A) ON THIS ISSUE. IT IS ACCORDINGLY CONFIRMED AND TH E GROUNDS OF APPEAL NO.3 AND 4 OF THE REVENUE ARE REJECTED. 8. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 7.1.2011 SD/- SD/- (CHANDRA POOJARI) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 7TH JANUARY 2011 COPY FORWARDED TO: 1. M/S.RAVINDRANATH GE MEDICAL ASSOCIATION PVT. LTD. 6 -1-1070/1-4 LAKDI-KA-PUL HYDERABAD. 2. ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE HY DERABAD 3. COMMISSIONER OF INCOME-TAX(APPEALS)-I HYDERABAD. 4. COMMISSIONER OF INCOME-TAX I HYDERABAD 5. THE DEPARTMENTAL REPRESENTATIVE ITAT HYDERABAD. B.V.S ITA NO .190./HYD/10 M/S.RAVINDRANATH GE MEDICAL ASSOCIATION PVT. LTD. HYDERABAD. 4